Natural Gas Daily: July 2nd, 2020
Gas-on-gas competition (GOG) pricing clauses increased further in 2019, according to a wholesale gas price survey published by the International Gas Union (IGU), climbing by one percentage point to 48.4%.
- The growth of GOG mechanisms, whereby the price is determined by the interplay of supply and demand, was almost entirely at the expense of oil price escalation (OPE) mechanisms, under which the price is linked to that of a competing fuel, typically dated Brent.
A massive increase in research and development spending is needed if the world is to achieve its greenhouse gas emissions reduction targets without damaging energy security, the International Energy Agency (IEA) warned in a new report. And it does not see these targets as realistic, given today's other challenges.
- Some major sectors such as shipping, trucking, aviation and heavy industries like steel, cement and chemicals have no commercial solution for net-zero emissions.
Europe's spot gas supply is coming down, thanks to the substantial slowdown of LNG imports, which has led to an unprecedented free fall in LNG send-out, according to research by Marex Spectron. It said regasified LNG sendout in week 27 was another 10% down on the week although Russian pipeline gas in the east has partially rebalanced the loss.
- At one point, prices at the Dutch hub, the Title Transfer Facility – Europe's most liquid – were lower than US Henry Hub prices although they have since moved above, a state of affairs the trader expects to continue for the rest of summer.
Baker Hughes reported a modest five-rig uptick in the number of active rigs in Canada in its report, published a day earlier than normal because of the planned July 4 holiday in the US.
John Bayko, spokesman for the Canadian Association of Oilwell Drilling Contractors, told NGW drillers in western Canada are hoping the increase isn’t a one-time blip, given the steady decline in drilling in Canada and the US since the twin hammers of the oil price war and the Covid-19 pandemic hit in March.
Ukraine's major pipeline operator Gas TSO of Ukraine (GTSOU) said that its Slovak neighbour Eustream could offer even more capacity at the biggest entry point, Velke Kapusany, and for a longer period than it has proposed.
It also said Eustream could also follow European regulations to ease traders' concerns about gas flows, as was the case already with transmission system operators (TSOs) in its other neighbours: Poland, Hungary, Romania, and Moldova.
The Changqing oilfield’s production during the six months to June 30 was 30.83mn metric tons of oil equivalent, up 6% yr/yr, the project's operator CNPC said in a statement.
- The Changqing oilfield, one of China’s biggest, is located in the country's northern Ordos basin.
- Slowing demand growth and increasing domestic output have dampened gas imports.